By Karen Brettell

NEW YORK, Nov 11 (Reuters) - Efforts to turn around Japanese consumer lender Aiful Corp (8515.T: Quote, Profile, Research) are raising new complications relating to credit default swaps in Japan, which some market participants say could have a wide-ranging impact on use of the contracts in the country.

Aiful, Japan's second-largest consumer lender by assets, has missed payments due on its loans, and its lenders have been unable to trigger payments on credit default swaps protecting the debt because the company has not publicly disclosed the missed payments, sources said.

Holders of CDSs are now concerned that future instances in which distressed companies miss debt payments could lead to similar frustrations in obtaining payments for debt protection. That in turn would devalue CDSs and could roil bank lending in Japan.

Aiful said in September said it would seek to enter into what's known as an Alternative Dispute Resolution process, to turn around its business.

As part of the process, the company said it would ask creditors to push back repayments on $3 billion of debt. See [ID:nT104420]

Since then, the company has failed to make multiple loan payments worth several billions of dollars that were due in September, said people familiar with the matter.

At a meeting with lenders in October, the company gave out documents that said it was undergoing the ADR process and listed a number of loan payments it would not make, the sources said.

Aiful spokesman Kenichi Hashimoto declined to comment.